Made in China

Joe Qiu's interior for a Chinese Buick caught Detroit's eye--and got Shanghai into a global design bake-off.

The Chinese LaCrosse was designed entirely in GM's PATAC studio--with enough bling to sate Shanghai's young buyers.

PATAC's rapid rise signals a revolution in process, both at GM and in China. Six years ago, its design team was a group of just 23 employees, none of them with design backgrounds, housed near the company's auto factory. "The design archive consisted of 20 brochures for the Volkswagen Santana, and I thought, Man, have we got a problem here," says Shyr, whom GM hired away from Nissan's Taiwan studio to create the new design center. In those days, "our team took the existing car architecture and adapted for China," Bierzynski says. "Localizing was like a machine here."

Today, PATAC's design team is more than 100 people--all of them Chinese save for one Canadian, Mike Stapleton, who joined 18 months ago. And it's a key player in a corporate design strategy that relies on recruiting and connecting talent from all around the world. Beginning six years ago, "we said, 'Wait a minute, the world is bigger than Detroit. It's bigger than North America,' and that there are some pretty cool things to learn from the rest of the world and the rest of GM," says Anne Asensio, GM's executive director of advanced design. "Going global wasn't about pushing our practices on others, but going beyond that to realize that, for example, someone can do something very cool in GM Europe and the people at Holden in Australia can learn from it and use it."

Americans have become comfortable with the notion that our competitive advantage--innovative energy and smarts--can't be outsourced. But what if it isn't true?

The reality, of course, is that this reconsideration of the world order isn't happening nearly fast enough. GM is still struggling to rescue its business in the United States, where its market share dropped to 24.3% last year from 25.9% in 2005. In Europe, it faces tough pricing pressures and increased competition from Japanese automakers. Meanwhile, it's having to restate its financial results for 2002 through 2006.

But as important as it could be for GM's future, PATAC's growing success says even more about the evolution of globalization and the role rising nations, especially China, will play. Americans have become comfortable with the notion that call centers will be staffed in India, software programs coded in Russia, and car parts manufactured in China. Ultimately, outsourcing is accepted because, while it sometimes takes work out of this country, it's generally in service of low-value commodity products. In the end, that means lower prices for companies and consumers.

We're okay with that, because we believe America's competitive advantage--unbridled innovative energy and smarts--can't be outsourced. Rising nations may have cost advantages, conventional wisdom has it, but they can't match America's creativity. Certainly, that's how Detroit saw the world not so long ago.

But the work going on inside two GM studios more than 6,000 miles apart reflects a different reality. Instead of taking orders from the United States, China is taking the lead on creative strategy. Grunt work, like writing millions of lines of code to make three-dimensional car models, is shipped to Detroit as readily as it is to Shanghai or Bangalore. "We aren't the little voice at the end of the phone anymore," Bierzynski says. "China commands 8 million units a year. We're GM's second-biggest market. We are the experts."

It's 6 a.m. in Shanghai, and Qiu, Shyr, and Stapleton are already having a not-so-great day. Their disembodied voices sound tired and a bit edgy. They've just presented their parts of the core design for the LaCrosse's interior. And their bosses, sitting halfway around the world in the dimly lit virtual-reality room in GM's design center north of Detroit, are arguing over the tiniest of details.

Ed Welburn, chief of design and 35-year veteran of GM's design team, sweeps his laser-light pointer across a computer rendering of the car's "B" pillar, the combination of steel, sheet metal, and plastic that connects the front of the car to the back. He picks out minute details on the color and questions the way the pieces of plastic fit together. Shifting to the interior's rear, he fusses over mismatched colors between the seat and door. There are questions about chrome and wood and leather and whether a fit line can be brought down from 2 millimeters to 1.

After an hour of defending their designs, the China hands sign off to begin a long day of changes. Qiu will be in the office until 9 p.m. as he pushes to meet deadlines. The Buick's final design must be "frozen"--that's car talk for "finished"--within the next few weeks.